Student overdraft is going to begin charging interest

MrJester

grumbler wrote: »

No, your aim is to reduce the balance, not the limit.

If the limit is £1500 you are allowed to borrow up to £1500. You can pay everything you owe back and have the same limit.

If the limit is £1500 and the balance is less than -£1400, you can reduce the limit to £1400 without paying anything back.

By reducing the limit, I am therefor reducing the balance (that I owe to them).

Of course I could have the same limit. If my balance is lets say -£500, then I can decide that I will reduce the limit to £1400 - this is paying them back. It's my money that has gone in there to pull the balance away from its limit, so by reducing my OD limit, I am giving them back the money I borrowed permanently.

I think we're saying the same thing but one of us calls it potayto and the other calls it potarto.

MrJester

diamonds wrote: »

The aim is to pay no interest or fees

Santander or a 0% credit card

Except of course the likelihood of being a % fee on a transfer

PeacefulWaters

MrJester wrote: »

By reducing the limit, I am therefor reducing the balance (that I owe to them).

Of course I could have the same limit. If my balance is lets say -£500, then I can decide that I will reduce the limit to £1400 - this is paying them back. It's my money that has gone in there to pull the balance away from its limit, so by reducing my OD limit, I am giving them back the money I borrowed permanently.

I think we're saying the same thing but one of us calls it potayto and the other calls it potarto.

I've had a £10,000 overdraft limit for years.

Never been overdrawn.

It's not obligatory to utilise a limit.

MrJester

PeacefulWaters wrote: »

I've had a £10,000 overdraft limit for years.

Never been overdrawn.

It's not obligatory to utilise a limit.

Maybe I've not been clear for everyone.

I do not rarely have enough money in my account to keep me above £0. Only when I first get paid it goes slightly above to £100ish, so essentially all my spending is within an overdraft. I am always in minus balance on it. I have always had to utilise my limit, which is from having it during university and have not been able to pay it back because I've had other pressing debts like credit cards to try and bring down.

grumbler

MrJester wrote: »

By reducing the limit, I am therefor reducing the balance (that I owe to them).

No, they are different things.
To reduce the balance you simply pay money.
Then you may or may not ask them to reduce the limit accordingly.

The lower the limit the easily it is to exceed it (slip into unarranged overdraft) and incur extra charges for this.

Of course I could have the same limit. If my balance is lets say -£500, then I can decide that I will reduce the limit to £1400 - this is paying them back.

No, you don't pay back anything if the balance remains the same and the limit is reduced.

It's my money that has gone in there to pull the balance away from its limit, so by reducing my OD limit, I am giving them back the money I borrowed permanently.

No, if you just pay money, this doesn't affect the limit.

If the speed limit is 50 you can drive at any speed below 50, but your speed doesn't affect the limit. And you get punished for exceeding the limit. As simple as that.

MrJester

grumbler wrote: »

No, they are different things.
To reduce the balance you simply pay money.
Then you may or may not ask them to reduce the limit accordingly.

The lower the limit the easily it is to exceed it (slip into unarranged overdraft) and incur extra charges for this.

No, you don't pay back anything is the balance remains the same and the limit is reduced.

No, if you just pay money, this doesn't affect the limit.

If the speed limit is 50 you can drive at any speed below 50, but your speed doesn't affect the limit. And you get punished for exceeding the limit. As simple as that.

This is just getting more confusing.

Are you saying that, if I want to pay back my bank for the overdraft I have borrowed. I would have to speak to them and say "I would like to pay you back £100 of the overdraft. [They take payment] and please now also reduce the Overdraft limit from £1500 to £1400."

?

I think I'm getting my head around it now that I've explained it to myself.. It just seems really odd to me, is the following example still true if done?

I have an Overdraft limit of £1500.
I pay in enough money to bring the balance to £0.
I ask them to remove the overdraft limit.
Done, I owe them nothing further.

?

Can you see where I'm getting confused here?

grumbler

MrJester wrote: »

This is just getting more confusing.

Are you saying that, if I want to pay back my bank for the overdraft I have borrowed.
I would have to speak to them and say "I would like to pay you back £100 of the overdraft.

No. Where did I say anything like this? You simply pay without asking.

[They take payment] and please now also reduce the Overdraft limit from £1500 to £1400."

Yes, you can ask to reduce the limit if you wish, but as I said earlier, I don't see any point in doing this.

?I think I'm getting my head around it now that I've explained it to myself.. It just seems really odd to me, is the following example still true if done?

I have an Overdraft limit of £1500.
I pay in enough money to bring the balance to £0.
I ask them to remove the overdraft limit.
Done, I owe them nothing further.

Yes, but you owe them nothing after bringing the balance to £0. You can keep the limit, say, for emergencies, and owe them nothing until you get overdrawn again.

Can you see where I'm getting confused here?

No.

MrJester

grumbler wrote: »

Yes, you can ask to reduce the limit if you wish, but as I said earlier, I don't see any point in doing this.

Well, otherwise the limit is larger than it needs to be and I can remove temptation into utilising it again. It also signifies to me that I have paid x amount back.

I believe this is where we have been getting mixed up, I basically am talking about reducing the limit as a signifier to myself that I have paid x amount back to them. I thought what you were trying to tell me is that reducing the limit doesn't pay them back - when in a way, it does, because I no longer have the same limit to spend if I reduce the limit.

grumbler wrote: »

No

I am warming to your grumblings.

diamonds

MrJester wrote: »

Except of course the likelihood of being a % fee on a transfer

Yes but card dependant, choose the best card offer for the best period, not just the best period.

MrJester

Here's another question for y'all.

Just had a thought. I have a credit card that will drop its 0% from September time also, around the same time as the Overdraft begins interest.

Is this right to assume that; because money transfers are often harder to obtain, and at worse rates, I should concentrate all my efforts into using extra money paying off debt into the Overdraft I currently have? (As opposed to working on that mentioned credit card which I have been doing recently)